Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Investing in Crypto Currencies With Both Eyes WIDE OPEN! - 25th Oct 21
Is Bitcoin a Better Inflation Hedge Than Gold? - 25th Oct 21
S&P 500 Stirs the Gold Pot - 25th Oct 21
Stock Market Against Bond Market Odds - 25th Oct 21
Inflation Consequences for the Stock Market, FED Balance Sheet - 24th Oct 21
To Be or Not to Be: How the Evergrande Crisis Can Affect Gold Price - 24th Oct 21
During a Market Mania, "no prudent professional is perceived to add value" - 24th Oct 21
Stock Market S&P500 Rallies Above $4400 – May Attempt To Advance To $4750~$4800 - 24th Oct 21
Inflation and the Crazy Crypto Markets - 23rd Oct 21
Easy PC Upgrades with Motherboard Combos - Overclockers UK Unboxing - MB, Memory and Ryzen 5600x CPU - 23rd Oct 21
Gold Mining Stocks Q3 2021 - 23rd Oct 21
Gold calmly continues cobbling its Handle, Miners lay in wait - 23rd Oct 21
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock and Commodity Market Investors Heading for Six Months of Hell

Stock-Markets / Financial Markets 2010 Feb 16, 2010 - 08:17 AM GMT

By: Larry_Edelson

Stock-Markets

Best Financial Markets Analysis ArticleIn last week’s column, I reviewed the profits you should have bagged the week earlier. Total now, since March of last year, assuming you followed all of my suggestions: 11 closed out trades, including 9 winners — with gains of as much as 91.7% — one breakeven trade, and one loser. Not bad for just over 10 months.


I also reviewed with you three major reasons why the bull market in natural resources is still very much intact. More on that in a minute.

First, a warning: For the next three to six months, the markets will be shifting into a period of extreme volatility. It will be characterized by wild swings that will spook even the savviest and most professional of traders.

So you’re going to need nerves of steel. I’ll be sure to give you the extra guidance that you’ll need.

After all, not only are the cycles in the markets themselves shifting — but so are the underlying fundamentals. I’m not talking about any particular economic statistic. On a case-by-case basis, they don’t mean much.

That’s important to understand, because even when taken together, most economic data is not very helpful for investing because they are backward looking.

Stats such as unemployment, layoffs, manufacturing data, inventories, payrolls, even gross domestic product — tell you what happened, not what’s going to happen

For a forward-looking perspective that can help you anticipate what the markets are likely to do, you have to use the study of the science of cycles. That’s what I do, and I’ve been doing it extensively for almost thirty years.

And right now, the main cycles affecting all markets are shifting from strongly upward trending … to short-term, violently choppy patterns.

So you are bound to see …

arrow black Dead Ahead: Six Months of Investor Hell  A multi-month period of very large swings, in almost all markets. I’m talking several hundred points up and down in the Dow … $100 to $200 trading ranges in gold … $20 to $30 trading ranges in oil … and violent moves in just about everything publicly traded.

Importantly, you are also about to see …

arrow black Dead Ahead: Six Months of Investor Hell  Mass confusion in society at large. You will see mixed economic data streaming out. Many stats good; many terrible. For those who follow the fundamental forces impacting the economy and markets, you will be in a state of utter confusion.

You will also see tremendous swings in politics, both domestically and internationally. Obama’s popularity sinking like a rock … then surging … only to sink again. Crises in Europe, like that of Greece, will burst onto the scene, only to be resolved a few days later, then re-emerge in another country.

You will see increased trade tensions between countries … accusations … bickering, and more.

And, you will see investors swing from extreme optimism … to severe pessimism, and back.

But most of all, the majority of investors will get chopped to pieces in the markets.

Make No Mistake About It: You’re Entering Six Months of Investor Hell.

The best way to handle it …

A. Do NOT overtrade. Overtrading in general tends to lead to losses, no matter what the markets are doing.

In periods where the markets are swinging wildly, overtrading is often disastrous.

B. When you trade for speculative purposes over the next six months, be especially keen to try and buy on weakness and sell on strength … and always use a protective stop to limit your risk.

Moreover …

C. Don’t let emotions or the news get to you! I don’t know a single successful investor or trader who watches CNBC or Bloomberg, or listens to any business radio show.

They’re great entertainment, and ok to watch or listen to when you are not making investment or trading decisions.

But no matter what you do, never, I repeat never, invest based on the news. And never let any news or any kind of business media allow you to become emotional. It’s a sure fire way to lose money.

Most of all …

D. Keep the long-term in perspective for your core investment positions.

Long-term trends do not change that often. They span years, even decades. So to maximize your profit potential from them, you simply can’t let the short-term sway you.

Consider the natural resource bull markets. Last week, I gave you three undeniable long-term fundamental forces that are driving those markets higher.

Now consider the following research, released late last year by the think-tank, the Global Footprint Network …

It now takes almost 18 months for the Earth to regenerate what humanity consumes in one year.

Put another way, just to sustain current natural resource consumption levels — 1.4 planet Earths are needed, RIGHT NOW.

How many planets we'd need if everyone lived like a resident of the following...

Even more shocking from the institute’s research is the new data it published projecting what the world would consume if everyone on the planet lived like a resident of various emerging and developed countries.

You can see the data graphically displayed in the table to the right.

On the low end, if everyone in the world used natural resources at India’s very low rate of consumption, an additional planet equal to 40% of the Earth’s size would be needed, RIGHT NOW.

At China’s higher level of consumption, one full additional planet would be needed, RIGHT NOW.

If everyone consumed natural resources at the rate U.K. citizens are, an additional 3.4 planets would be needed.

And if everyone consumed resources at the rate U.S. citizens are, an additional FIVE MOTHER EARTHS WOULD BE NEEDED RIGHT NOW JUST TO BALANCE SUPPLIES WITH CONSUMPTION!

Naturally, consumption levels in the rest of the world are not likely to climb to the U.S. level of use.

But even if they were to rise to just half of U.S. consumption levels, you would still need 2.5 Mother Earths to balance the growing demand with consumption.

More from the institute …

arrow black Dead Ahead: Six Months of Investor Hell  The average American uses a whopping 23 acres worth of biocapacity, while the average European uses only about half that.

arrow black Dead Ahead: Six Months of Investor Hell  The U.S. represents just 4.5% of the world’s population, but consumes more than five times as much natural resources, a full 23% of world biocapacity.

arrow black Dead Ahead: Six Months of Investor Hell  China now consumes about the same level of resources that the U.S. does, but with its population more than four times larger, per capita resource consumption in China is less than one-fourth that of an American.

But that’s today. Five, 10, 20 years from now, China (and India) will likely be consuming far more natural resources, while I doubt U.S. or any other Western economy’s consumption will fall very much.

Bottom line to all this: The world is facing a massive shortage of basic natural resources that will, in just a few years, reach crisis levels.

Stay tuned, and as always, best wishes …

Larry

P.S. Uncommon Wisdom has teamed up with the Red Cross to help bring in donations for the earthquake victims in Haiti. If you’d like to make a contribution, just click here now.

This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in